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Revenues, Rates, and Advance Planning
Author(s) -
Howson Louis R.
Publication year - 1960
Publication title -
journal ‐ american water works association
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.466
H-Index - 74
eISSN - 1551-8833
pISSN - 0003-150X
DOI - 10.1002/j.1551-8833.1960.tb00469.x
Subject(s) - revenue , debt service coverage ratio , per capita , debt , finance , business , revenue bond , service (business) , bond , non revenue water , water utility , public finance , interest rate , economics , natural resource economics , agricultural economics , water conservation , external debt , water supply , water resources , engineering , macroeconomics , marketing , environmental engineering , biology , ecology , population , demography , sociology
This article discusses advance planning and how it facilitates the financing of new construction from current revenues, and results in a material savings in the cost of water service. Advance planning for construction and financing reduces the necessity for bond elections, which may cause consumer agitation. The money necessary to finance the growth of public water supplies must come from water revenue, whether directly or indirectly. Adequate revenue is, therefore, a prerequisite to good water service. In general, city councils, which fix water rates for most U.S. cities, have authorized rates that permitted greater expansion than privately owned utilities can afford, many of which are under unrealistic regulation. Publicly owned utilities have doubled their per capita debt in the last decade, whereas the privately owned utilities have kept their per capita debt almost constant. More than half the cost of plant additions in municipal water plants was funded by debt.